MBA: Fewer Households Missed Rent, Mortgage Payments in 2Q

Slightly less than 5 million households did not make their rent or mortgage payments in the second quarter of 2021, according to updated research released today by the Mortgage Bankers Association's (MBA) Research Institute for Housing America (RIHA).

The study, Housing-Related Financial Distress During the Pandemic, found that 8.6% of renters (2.86 million households) missed, delayed, or made a reduced payment in June 2021, while 4.6% homeowners (2.19 million) missed their mortgage payments.  

"Given the level of government support during the pandemic and the more recent improvements in the economy and labor market, it is quite possible that the observed levels of rental non-payments may be at or close to pre-pandemic levels," said Gary V. Engelhardt, professor of economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University. "However, the recent rise in COVID-19 cases, and elevated inflationary pressures, could slow economic growth and hiring. These potential headwinds could also impact households still facing hardships."  

Since the onset of the pandemic in the second quarter of 2020, 6.8% of renters and 5.7% of homeowners have missed four or more payments. Missed rental payments now total $41.7 billion, while missed mortgage payments total $76.5 billion.  

"Homeowners' employment situation and ability to make their mortgage payments has meaningfully improved since the onset of the pandemic," said Edward Seiler, executive director of RIHA and MBA's associate vice president, housing economics. "Most homeowners still behind on their payments are in a mortgage forbearance plan. For those still facing hardships once their forbearance plan expires, loan modifications, payment deferrals, and loan payoffs — through either refinancing or a home sale — are all options that could prevent a foreclosure." 

Some key findings of the study:

• Slightly fewer renters and homeowners missed payments in the second quarter of 2021 compared to the first quarter. However, more renters and homeowners missed their June payment than their March payment: 2.86 million renters (8.6%) and 2.19 million (4.6%) mortgagors missed payments in June, up from 4.53 million households that missed payments in March (7.2% of renters and 4.5% of mortgagors).
• Property owners continue to play a key role in helping renters: 11% of renters missed one payment over the 15 months of the pandemic, 4.4% missed two payments, 2.7% missed three payments, and 6.8% missed four or more payments. In aggregate, rental property owners lost as much as $7.10 billion in second-quarter revenue from missed rent payments. This was down from $7.48 billion in the first quarter of 2021.
• Homeowners were the least likely to miss a payment since the second quarter of 2020: 85.4% of mortgagors made all their mortgage payments, 5.6% missed one payment, 1.9% missed two payments, 1.4% missed three payments, and 5.7% missed four or more payments.

To read the full news release, click here.